Hostess May Shut Down If Strikers Don't Return To Work

Hostess Brands Inc. said it will ask a U.S. bankruptcy judge for permission to liquidate if enough striking workers do not return to work by the end of Thursday to let the maker of Twinkies and Wonder Bread resume normal operations.

Wednesday's announcement escalates a bitter dispute between the 82-year-old company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, whose members constitute about one-third of Hostess' nearly 18,000 employees.

A union spokeswoman said the union would have no immediate comment.

Workers at Hostess plants across the country had gone on strike or refused to cross picket lines on Nov. 9 to protest pay cuts that Hostess had in bankruptcy court won the right to impose. That prompted the company at the time to raise the specter of liquidation in case of a widespread strike.

On Wednesday, Hostess said that if enough striking workers did not return to work by 5 p.m. EST Thursday, the company would on Friday ask U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., who oversees its Chapter 11 reorganization, for permission to shut down and sell assets.

"We simply do not have the financial resources to survive an ongoing national strike," Hostess Chief Executive Gregory Rayburn said in a statement.

The Irving, Texas-based company had previously reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.

Hostess said that if it wins permission to liquidate, it will begin to close all operations as soon as Nov. 20, two days before Thanksgiving, and fire all plant workers except those needed to prepare its facilities for sale.

Earlier this week, Hostess said the strike forced it to permanently close three of its 36 bakeries, costing 627 jobs.

The company said that it has 565 distribution centers and 570 bakery outlet stores, as well as the 33 other bakeries.

Hostess filed for protection from creditors on Jan. 11, its second bankruptcy filing in less than three years, after failing to win concessions on pension and health benefits. The company had about $860 million of debt at the time.